Two Venture Capital Units Are One Too Many at Fleet

Stock, Helen, American Banker

FleetBoston Financial Corp. resolved one of its last merger-related issues this week when it announced it would spin off Fleet Equity Partners, one of its two venture capital units. It was perhaps one of the more obvious branding decisions the combined bank has made since Fleet Financial Group and BankBoston Corp. merged last year. Fleet Equity Partners is the smaller, younger, more independent private equity business -- a partnership controlled by FleetBoston and the firm's management. BancBoston Capital is a global, more established firm, and is tightly woven into the fabric of its parent bank, on which it relies for client leads and direct investment capital. The units, each marketed as part of FleetBoston Financial, were creating confusion. "We had two groups with two different philosophies," said Henrique de Campos Meirelles, FleetBoston's president of global banking and financial services. "That was kind of confusing some customers and some potential companies, and now we've made it clear." Fleet Equity Partners has been renamed Navis Partners and will officially shed ownership ties to FleetBoston in August. There will be no financial implications for FleetBoston, which will retain the same ownership stakes in its funds but will no longer have control over the business. Certainly, Fleet Equity might have gone solo even without the Fleet-BankBoston merger. But Mr. Meirelles, who heads all wholesale banking activities at FleetBoston, said the merger pressed the issue. The move highlights the varying degrees of control commercial banks have exercised over their private equity units. At one end of the spectrum is Chase Capital Partners, the $18 billion direct-investing unit of Chase Manhattan Corp. …

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